A Slow Start. A Fast Finish?
Sort of like my new favorite horse, the week is starting slow with London closed today. However, a strong move mid-week and a fast finish down the stretch may be in store. Let's get started! Go, Orb. Go!!!
However, before we can make any kind of sustained move, we must first pass a wall of horses in front of us. In gold, the evil and nasty competition has placed a barrier on the chart at $1480-1485. Clearing that level will hold the key. The psychological resistance of $1500 might also slow our pace but we should pass that nag without too much trouble. IF we can pull off this kind of rally, we'll set ourselves up for a stretch duel with the all-important and critical level of $1525-1530.
You've heard me mention countless times how support becomes resistance and vice versa. Well, the impending Battle of 1525 will be a grandiose version of that principle. Recall that gold was held for 19 months between $1525 and $1800. The $200, 2-day collapse only occurred once gold was broken down and out of that range. Getting back through and above $1525 would prove the entire episode to be a paper charade fakeout and the shorts will do just about anything to prevent this from happening. The fun part for race fans is this: It is where we're headed! I might be too optimistic to
expect hope that we will be there by the end of this week or early next but we'll see. I, for one, am going to position myself down by the rail so that I might have a perfect view of the action.
The old, gray mare just ain't what she used to be but she's still in the race and she faces a similar path to the wire. The Forces of Darkness have laid down a line of resistance at 24.50. Why there, you ask? Why not? It's as good a place as any and, as of today, it also coincides with the 20-day MA of the July silver contract. Ahhh, whatever. It is what it is and I think it will fail, too. IF I'm correct about this, and silver is able to move through the April 25 peak near $24.80, a little tap of the whip should be all it takes to send silver surging to the front and its own Battle of 26. Just like gold, silver was held for 19 months between $26 and $36. Getting back above $26 is now primary target #1. Can it? Will it? We'll see.
Three bits of reading to start your week. First, there's this from Alasdair Macleod: http://www.goldmoney.com/gold-research/alasdair-macleod/the-case-against-deflation.html. Next, this brief article from Hugo Salinas-Price on the 2-day beatdown of last month: http://www.plata.com.mx/mplata/articulos/articlesFilt.asp?fiidarticulo=210 And there there's this excellent piece from Jeff Nielson where he estimates China's gold reserves to be over 4,000 mts. I think he's still a little low, but, regardless...http://www.bullionbullscanada.com/gold-commentary/26166-chinas-real-gold-reserves-at-4000-tonnes
Finally, my horsey "Orb" has inspired me to start a new Hat Contest! Here are the rules:
- Predict the kitco chart closing price of gold and silver for Friday, June 7.
- To win, though, each winner must also predict whether or not ole Orb will win The Triple Crown, the third leg of which will be run the following day at Belmont Park outside of NYC.
- As usual, please use the comments section of this thread for your guesses. I'll close this thread to new comments/guesses at 10:00 am EDT tomorrow.
Have a great day!